Arthur was involuntarily petitioned into bankruptcy by three of ...

[clippers!]

Arthur was involuntarily petitioned into bankruptcy by three of his creditors. When the trustee reviewed Arthur's books and records, the trustee discovered the following transactions: (a) Three weeks before the filing of the petition, Arthur paid cash for 17,000 worth of inventory for his store; and (b) Twelve days before the filing of the petition, Arthur paid 300 in full satisfaction of his store's most recent electric bill. The trustee is considering attempting to set aside both of these transfers as preferential transfers. Discuss the advisability of the trustee's attempt to set aside these transfers.

Question 2

Alladult covenants are:
 A)Unenforceable.
 B)Violative of the Fourteenth Amendment.
 C)Invalid in apartment complexes.
 D)None of the above

[jaymee143]

Answer to Question 1

Neither of these transfers constitutes a preference. A transaction for present consideration, such as a cash sale, is not subject to being set aside. Further, a payment by a debtor in the ordinary course of business, such as the payment of a utility bill, will not be set aside. Arthur's payment of 17,000 for store inventory is a transaction for present consideration, as well as a payment in the ordinary course of business. Although his payment of the electric bill is arguably payment for something received earlier (electricity), it is, nevertheless, a payment in the ordinary course of business.

Answer to Question 2

D

[clippers!]

Correct answers!

[jaymee143]

Great! Please up vote